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IMF Greenlights Addition Of Chinese Yuan To SDR Basket: Wall Street Responds
While the world was following the tragic events unfolding on Friday night in France where hundreds of innocent civilians were killed or injured, an important economic development took place at the IMF, whose staff and head Christine Lagarde, officially greenlighted the acceptance of China's currency - the Renminbi, or Yuan - into the IMF's foreign exchange basket, also known as the Special Drawing Rights.
As Reuters summarizes, the recommendation paves the way for the Fund's executive board, which has the final say, to place the yuan on a par with the U.S. dollar Japanese yen, British pound and euro at a meeting scheduled for November 30. At this point only an explicit veto by US political interests deep behind the stage can derail the CNY's ascension into the SDR. The United States, the Fund's biggest shareholder, has said it would back the yuan's inclusion if it met the IMF's criteria, a U.S. Treasury spokesperson said, adding: "We will review the IMF’s paper in that light."
If the yuan's addition wins 70 percent or more of IMF board votes, it will be the first time the number of currencies in the SDR basket - which determines the composition of loans made to countries such as Greece - has been expanded."
I would say that the likelihood of China's yuan joining the IMF currency basket this year is very high," said Hong Kong-based Shen Jianguang, chief economist at Mizuho Securities Asia.
"The only thing that could deter this is if the U.S. led a group rejecting the yuan's inclusion, which could complicate things. But the United States' current official stance doesn't reflect such an attitude," he said.
Unless something dramatically changes in the next three weeks, of course, although that seems unlikely: moments ago Bloomberg reported that Treasury Secretary Lew met with Chinese Vice Premier Wang Yang and Finance Minister Lou Jiwei on the sidelines of the G-20 Leaders Summit in Antalya, Turkey, according to readout sent via e-mail by U.S. Treasury, where “Secretary Lew reiterated that the United States intends to support the Renminbi’s inclusion in the Special Drawing Rights basket provided the currency meets the International Monetary Fund’s existing criteria."
The executive board, which represents the Fund's 188 members, is seen as unlikely to go against a staff recommendation and countries including France and Britain have already pledged their support for the change. This would take effect in October 2016, during China's leadership of the Group of 20 bloc of advanced and emerging economies.
As Reuters further adds, joining the Special Drawing Rights (SDR) basket would be a victory for Beijing, which has campaigned hard for the move, and could increase demand for the yuan among reserve managers as well as marking a symbolic coming of age for the world's second-largest economy. In an ironic twist,, while the IMF has historically delayed the moment of acceptance, it caved just months after China officially devalued its currency for the first time in decades to stimulate its exports, and has unleashed an unprecedented campaign (using overt and covert means) to stabilize the Yuan as capital outflows in the past several months have soared.
Reuters is likewise amused by this hypocrisy: "China's heavy-handed intervention to stem a stock market rout over the summer, and an unexpected devaluation of the yuan in August, had raised some doubts about Beijing's commitment to reforms."
Unless, of course, the whole facade of "reform" is just an epic smokescreen and what the IMF is truly rewarding is gross market manipulation and currency warfare, such as what all developed nations have engaged in since the great financial crisis.
Singapore-based Commerzbank economist Zhou Hao said China needs to further accelerate domestic reforms and improve policy transparency. "The PBOC should reduce the frequency of market intervention, allowing market forces to really play a critical role."
No matter what the real reasons behind the historic development, IMF said its staff had found the yuan met the criteria of being “freely usable,” or widely used for international transactions and widely traded in major foreign exchange markets, Lagarde said. “I support the staff’s findings," she said in a statement immediately welcomed by China's central bank, which said it hoped the international community would also back the yuan's inclusion.
Still, even if formally accepted, few if any reserve managers will rush out to buy Yuan: China's extensive capital controls mean it would take a while before the yuan rivals the dollar's dominant role in international trade and finance, analysts say.
Its closed capital account still limits foreigners from buying yuan-denominated assets and places caps on how much cash residents can take out of the country. These restrictions, along with concerns that the yuan is set to come under steady depreciation pressure, may cause corporates to back off from holding yuan.
Nonetheless, the People's Bank of China said the IMF statement was an acknowledgment of the progress China had made in reforms and opening up its economy.
We suppose by that it means arresting stock shorters, prominent fund managers, doubling margin requirements at will, and crushing anyone who dares to sell the currency in the "open market."
Putting aside this latest glaring example of globalist hypocrisy, here are the initial early responses by various Wall Street analysts.
HSBC:
- SDR inclusion would encourage China to stick to much- needed financial and capital-account liberalization, Paul Mackel, HK-based head of global research, writes in note dated Nov. 14
- USD/CNH moved above 6.4000 on Friday, which could suggest that more flexibility on yuan is coming
- Market players will want to see more volatility in the currency eventually; hence, inclusion in SDR doesn’t necessary mean that the RMB will be stronger
- Knee-jerk reaction for yuan to strengthen should be temporary; will be interesting to see if PBOC decides to become more hands-off
Commerzbank:
- China needs to show commitment to further opening up its capital account and accelerate domestic financial reforms, led by interest-rate liberalization, Zhou Hao, Singapore-based senior economist, writes in email
- Country needs to improve policy transparency to attract global investors; that would build trust between global investors and Chinese authorities
- PBOC should reduce frequency of intervention, allowing market forces to play a critical role
- China should provide more hedging options to corporates and financial institutions, so they can prepare for greater financial-market volatility
Huabao Trust:
- China stepped up rates liberalization in run-up to SDR inclusion; now it may increase pace of financial reform, Nie Wen, Shanghai-based economist, says in phone interview
- Onshore-offshore yuan spread is expected to narrow in coming days
- PBOC’s monetary policy stance will still be the most important element for investors to gauge regarding the yuan’s trading direction
- A more market-oriented system is crucial for Chinese capital markets; a “reasonable” pricing of domestic assets will reduce systemic risk
Maybank:
- Inclusion will largely be a symbolic move because slowing economy and capital-outflow pressures may delay FX reforms, Fiona Lim, senior FX analyst, says in phone interview
- SDR inclusion will improve “rationality” in investment and assets allocation, which will improve financial stability
SocGen:
- Any positive reaction on yuan’s possible inclusion in IMF reserves to be short-term, given that the outcome was well priced in, says Jason Daw, head of Asia currency strategy at Societe Generale SA in Singapore.
- Being added to SDR unlikely to speed up the pace of reserve diversification into Chinese assets, Daw says in Nov. 14 e- mail interview
- “We continue to see an upward bias to USD/CNY over the coming months and expect it to reach 6.80 by mid-2016.”
* * *
It would be most ironic, however, if China achieves its ultimate objective, which is simply to find foreign buyers for its currency as an offset to domestic outflows, which in turn sends the Yuan soaring beyond its pre-devaluation levels, thereby slamming the Chinese economy even further and assuring that the unfolding Chinese hard landing becomes a full-blown global crash .
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Yuan goes up, markets evenually crash. OK, but arent we heading in that direction anyways?
Wormer just dropped the big one.....and I'm NOT going to sit through another lecture on the number 7.
Was it over when the IMF bombed Pearl Harbor?
SDR Replaces the US dollars as world currency as next crisis becomes unmanageable. SDR just another fiat currency that keeps elites in control via IMF. Only way to take power away from criminal elites is to tie it to GOLD.
Oh, the hypocrisy of it all. The Chinese hypocrite market manipulators wanting to join the rest of the world's hypocritical market manipulators, but market manipulation causes concerns for the integrity of the system or some such crap.
Now listen.... The real test of whether China should be recognized as a World Power would be if Chinese Porn became the Staple of Bread and Circuses. Y'all hear me now?
Wankie wankie rise and shine
Yuan-a supersize that Happy Meal?
Whe cares about all this stuff, what does this do to the price of silver and gold???
They fall further of course. They only go down.
All financial news is bad for gold.
One thing for sure; the more fiat currencies they add to the SDR fantasy, the less it will help as it crashes. The Middle East now fully expects a major regional war involving the Europeans and US now and their markets reflect this:
11.15 Middle East Stock Markets in Turmoil as Saudi Drops 2.85% Dubai over 3%Until there is none left in the bullion banks and the Comex warehouses. And they are levered 300:1 now
If Gold is leveraged 300 to 1 silver must be 1000 to 1
It's funny that the world's titans of finance fuck heads call for China to "reform" their swindles, but are silent about their own.
If the Yuan is pegged to the USD, then this is just another conceit- a joke.
If China truly is the new powerhouse then let the Yuan float.
Do Chinese regulators know how to access porn?
While none of the currencies globally are viable under the current debt based monetary system but there is no viable solution yet on how to make people around the world use something/anything as a medium of exchange that is divisible and 'trusted' and is 'legal tender'.
Having said that, finding a new system and the costs associated with it will also be very challenging in current difficult times.
We have come thus far post the GFC mainly due to money printing, QE and whatever wars had to be fought.
We must remember that EUR was just born in 1997 and implemented in electronic form in 1998 and from Jan 1999 it became legal tender in currency notes form.
Here is the IMF circular when EUR was added to SDR effective Jan 1999.
IMF Incorporates the Euro into the SDR Valuation and Interest Rate BasketsIt is my view that China will keep rising, and IMF's SDR inclusion is just paving the way forward and strengthening the currency. As US loses it's grip on the global monetary system, it is hard for the American Govt hegemons to accept it thus China had to wait until now. If it was me, Chinese yuan would have been in IMF SDR about a decade ago when the manufacturing prowess of China was at it's peak.
We shall have many crises in the years ahead but inclusion of Chinese Yuan in the IMF led SDR basket which is the monetary system AS ON DATE will not make it any worse but slightly better because this will bring stability.
Global trade and spneding is increasingly being done in yuan and most goods are made in China whether we like it or not, and hence all the 210 countries need to have yuan available in their banking systems in order to continue trading with China.
In fact, this will make things slightly cheaper because globally, the wholesalers will not need to price in the FX fluctuations which they currently do when remitting to China.
Screw the big G-7 banks, they always have an agenda of their own survival. Usually they always lie and most analycysts are a pain in the butt anyways.
I am waiting for the day within the next few months when Saudi (post OPEC break up?) will announce acceptance of yuan for oil which will be the last day of the connection between the world's USD based monetary system as we know it and the new monetary system where Yuan will rule the roost over the next few decades.
Every single day, oil remains below USD 50-60 level, the neeed for the world's top 10 oil producers rises more and more and they are choking by this USD based system especially when US is no longer the world's top oil importer.......Why are the Chinese forced to pay in USD when they can simply use CNH....hence Chinese have stopped buying from Saudi and Saudi exports of oil to China have dropped 35% over the last decade.....
Same for India or any other major oil importer, if they buy oil in USD, it makes things that much more expensive due to exchange rates. The day the exporters move away from USD, they have to go closer to CNH being their largest importer of oil which is why inclusion of CNH in IMF's SDR is very important step for China who have got this approval to occur on Nov 30 this year instead of the date announced by IMF a few weeks ago of Oct 2016 for which in all likelihood, US was involved in pushing the day further.
We should hear the news on Dec 1 when the CNH will be included in IMF's SDR and this will be a major game changer because all Govt's will need to hold trillions in CNH in order to assist their domestic banks/importers to pay China in yuan.
Another perspective is that including the Yuan, but not gold or some other 'hard' currency, in the basket, will not bring stability as much as a new means to export inflation.
Yep, should be based on a basket of hard/soft commodities also. The SDR withouth backing by gold/silver/oil etc will just be a new form of fiat world money, IMF printing presses working overtime.
Of course we will not be able to use the SDRs, that will be for the individual countries/massive corporations ect.
It's all a fugazi without gold.
Saudis are not willing to sell oil in yuan. How long do you think they will hold , with their quickly vanishing FX reserves ? It went from 8XX billion to 60X billion last time when I checked.
How Yuan will remain stable unlike USD , Chinese will devaluate their currency ? I'm sure they won't allow it to float freely.
How did USD use to fare when US had its manufacturing base+Larges oil importer tag some 3-4 decades ago?
Saudis said due to Yuan sudden devalue or revalue ation they can't sell oil in Yuans for that they need a stable currency .
I'm all confused Dubai, help me out.
Thanks Max for the opportunity for me to elaborate and for asking the question.
Saudis are Not YET willing to accept yuan but several meetings have been held in Moscow along with Jordan, UAE, Egypt, China and Russia to discuss oil as well as Syria. Hence, the time is coming....
Saudi's holding capacity is diminishing every single day because of the expensive wars, largesse spending, weak oil and US not being their friend anymore (else why would Saudi visit Moscow, give 16 nuclear reactor order to Moscow and give USD 10bn to Moscow in cash to invest anywehere?). US does not buy much oil from no one least from Saudi except the long term contracts. Oil imports from Saudi by US have also declined more than 35% and will continue to drop. Military bases have been shut among other things.
Countries like Russia have started accepting yuan for oil. LME in UK accepts yuan. Gazprom in Russia accepts yuan. Malaysia accepts yuan. Iran accepts yuan.......Angola accepts yuan for oil and has also made yuan it's legal tender as has Zimbabwe made yuan it's ;legal tender.
So the day is not far when Saudi will have to accept yuan, but question is when?
I guess within the next 12 months.
Saudis have sold their cash, US treasury holdings and now also their equity holdings which are all public news. Hence, bulk of their liquid assets are gone and now the more illiquid assets will need to be sold or taxes implemented or country will be opened up or bonds will be issued. All this will cause country ratings to be reduced and reserves to continue to diminish at a very rapid pace. Saudi was downgraded to A rating about 2 weeks ago and all their 8 banks were downgraded as well last week. This will continue until they prop up their income as well as reduce their expenses.
To your point that yuan is unstable, I sincerely beg to differ.
Yuan is THE ONLY currency that has risen over 2 years, 5 years, 10 years and 20 years....
So, this opinion of the biased western analcysts/ever controlling Govts propagated through media as well as Western banks is completely biased and completely opposite of reality.
Just one look at a 20 year CNH chart will show that what I am saying is true.
Yuan is already floating freely as much as EUR and JPY are floating freely. To suggest that EUR and JPY are not being controlled by their Govts or for that matter any currency anywhere in the world backed by QE, bank manipulation and central bank nonsense in full public view, then I don't have much to say.
USD was a strong currency when it's manufacturing base was strong which is the period from 1900 to 1980. They built railroads, infra, steel plants, banks, gave foreign aid, were morally storng etc. However, since 1980 ever since the Reagan era, unlike UK's Thatcher era, money started being spent for no reason and the US Govt debt mushroomed from below USD 1 trillion to USD 19 trillion and perhaps it is running at USD 65 trilion or whatever nonsense there is.
Since 1980, USA lost it's mojo but was still ok until 9/11 occured and that was the pinnacle of the US empire and the empire has lost control of itself since then.
Ever since 9/11, money was looted, not spent, by whoever could i.e. bankers, MIC, guns, police, surveillance etc because the writing has been on the wall.
Look at where the cuts in th US were. At the space program, at most R&D whether medical or anything else, education, healthcare, infra etc. Even jobs got cut badly and sent overseas in some sort of a rushed manner.
USD would have remained strong if it was not for it's hegemony and giddy ideas of control in all it's senses over the rest of the 7.1 billion people.
Now US economic system cannot stop falling and the world is here to watch and is collaborating against the demise of the US empire. It is not sad because US called this upon itself. Instead of an adversarial approach, US could have chosen the path of least resistance but they used their military everywhere and incidents like Paris, refugee crisis, bans of goods by Russia on Europe, Middle East wars, oil price volatility are the reason why all of us public are paying the price of this lost empire trying to find a grip before slipping away into the annals of history.
Further, if you look at any currency over the last 50 years, they have all declined against the USD because it was doing so well.
UK's GBP used to be at 4.00 and today is at 1.55.
Indian Rupee was at 1:1 to USD in 1947 and today is at 66.
Nigeria used to be at 7 and now is at 260.
This shows how encompassing the US control over the whole world is and was and they could easily hurt any economy of their choice and send inflation to others till the time others have a need for USD.
Meanwhile, I have never seen anyone from Saudi say that they are not convinced of the yuan. Every country in the Middle East and the world over is embracing the yuan. 60 counties already hold yuan in their reserves and over 50 have signed swap agreements and have actually used them in the last 4-5 years. Big exception being USA. USA has not been allowed to have a yuan clearing centre nor any bonds have been issued or listed in USA etc. All this glory is for Europe, Middle East, Asia, Latam, Russia, etc. Everyone but the USA.
Saudis don't have a choice. Either they keep withering away while procrastinating over acceptance of yuan or they choose to accept it immediately and have a better life immediately.
Choice is completely in the hands of oil producers and Saudis themselves. They are being stopped only by themselves and their wishful thinking of the past and their own non willingness to embrace the future. And of course, the ramifications of the decision are immense and US will become a bitter enemy (just like an ex wife) of Saudi!
The question is not whether Saudis should accept yuan, the question is when will they accept it?
It is the destiny of Chinese yuan to rise. The choice is not even in the hands of China.
We have created factories at a speed of an average USD 100bn for the last 30 years which is about USD 3 trillion of OUR factories inside China. China has played it's cards very well and created a very stable economic system which is rising at a rapid clip regardless of what anyone's views may be.
The model of China is similar to America. US created factories since 1900 until the 1990's and was a strong power. Once the factories stopped being built, US lost it's mojo and the results are for all to see.
We are also responsible for the rise of China, not just China themselves.
Excellent response, while I think the writing has been on the wall since the creation of the federal reserve in 1913 but there have been several events that have been key points in the demise of the USA -
1. LBJ's 'guns and butter' programs, removing silver from coinage in 1964.
2. Nixon's gold shock in 1971.
3. Reagan removing copper from pennies in 1982.
Rome started to decline when the politicians of the day began debasing their currency, history may not repeat itself but it sure does rhyme...
I bet a fly on the wall could tell us quite a story why China has been so interested in obtaining large amounts of gold over the past 5 to 10 years. This accepantce by the IMF probably means the barbaric relic will continue to be capped while every last ounce is accumulated.
all other gold rich countries had to dishoard a portion of their gold to join the imf
This news should be absolutely no surprise. Recently the IMF had been broadcasting the same stuff as the Chinese. USofA was making no IMF payments, China will make IMF payments. After the decision not to include CNY in IMF basket, China racked the markets for the month. Then various forecasters all said it would happen...
Low and behold it happend. No surprise here.
Whether you like China or not, they are the only economy with healthy income and production right now of finished goods, and any kind of economy needs both income as well as spending.
They have a credit bubble that makes the rest of the world green with envy (remember how they were first to "stimulate" after the GFC and they did so like gangbusters?) and no amount of prowess in manufacturing cheap crap will help them, if the rest of the world can't trade with them due to a global depression.
And who invested in that bubble. US corporations that ran off shore to maintain gross margins. And congress that passed favorable tax shelters. And who elected congress ?
There is capital formation in China. But your point is mute, originally the IMF did NOT let China into the IMF why ? THEY did not have ENOUGH issued debt. If anyone is envious about debt and credit bubbles, they should envy the debt and bubble kings themselves the USofA. We get the credit king crown of all history.
China has something to show for its credit bubble... empty cities and malls for now but maybe one day they can be used, high speed railways across the country, energy projects etc. As for America, the only thing we have to show for our debt is a handful of billionaires.
And rich defense contractors !
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.wallstreet34.com
The PBOC should reduce the frequency of market intervention, allowing market forces to really play a critical role.
And the Fed should intervene in the markets every hour instead of every minute.
When was the last time that market forces played a crictical role in US markets?
Wang Yang. Kinky.
remember the Golden Rule......
Something to do with gold.....it will come to me.
Get lots on the QT
He who has the most gold, make the most rules.
Yes, I remember....He who has all the gold makes the rules....
He who prints the most Fiat makes the rules...there fixed it for ya.
He who has the gold has the unfortunate boating accidents.
well as a buyer , if Yuan goes UP that makes the crazy usd to my au$ better and I save money
I rather like that
"Based on the latest review conducted on December 30, 2010, the XDR(sic) basket consists of the following four currencies: U.S. dollars ($), euro (€), pounds sterling (£), and Japanese yen (¥)"
One more worthless fiat currency thrown in the basket. Why not currency with value, such as PM & BTC?
How long will thier little fantasy continue?
Not much longer, 'cause I suspect that Paris was just the first of many more to come...
Spoctor Din
The inclusion of another corrupt manipulated fiat currency will help bring confidence and stability to the world's finances.
Much like how a basket of sub prime mortgages can be sold as AAA.
Yes of course...
Become an official member of the "SDR" as we continue to taunt and threaten you in your own neighborhood with our "peace ships"and when that doesn't work mischief in massive short selling in your markets, destroying your property in various industrial areas inside your borders, just as we have been doing with Russia in Eastern Europe for the last 2 decades...
BRIICS or bust!!!
SDR = Special Drawing Robbery.
Secret Drone Reserves
Well, the elitist stockpilers in the US need a convenient place to run to when the US dollar hits the wall.
Getting into the SDR is a means to an end. It's the best way for China to usher in full internationalization of the Yuan, leading towards that critical mass where they can break the dollar's hold as the singular reserve currency, and then have enough gravitas to propose a return to gold backed money or trade settlement.
Dovie'andi se tovya sagain (It's time to toss the dice)
The Daily Economist
China does not want to be a single reserve currency.
China does not want to be part of a gold backed currency.
They want to be able to do what the US has done for the last 50 years.
Why would they not want that?
Gold backed currency means fiscal responsibility. No country wants fiscal responsibility...
I smell a Rothschild head fake
"IMF Greenlights Addition Of Chinese Yuan To SDR Basket: Wall Street Responds"
this means s&p up 30 points through e-minis on monday morning pre-open. gold hammered pre-open. any news is good news
But why the volte face by the IMF ?
They delayed enty for a year, not even two months ago.
G20 meet today, looks like this was to forestall something else.
What ?
Well that was quick. Got Gold ??
Nope, traded them for rules and lightbulbs.
I bet you got white lightbulbs you racist.
What will this news do to GOLD?
Nothing. Gold wasn't added to the basket.
Gold is required before a currency is added to the basket.
And what's the weighting of that relative to the joke fiat parts of the basket again?
This isn't about the stability of the Yuan, this is about the long-term stability of the SDR.
China will slow down buying gold. They added gold specifically to get their currency into SDR.
Longer term, gold will go down further.
China has, maybe, 20x the amount of gold that is "officially" reported. Your opinion is wrong.
It depends....
This looks like a vote of no-confidence for Uncle SAM. What changed since the last IMF vote this past August? The U.S. vetoed the move. This time around the U.S. is going to allow China into the SDR? The U.S. is quickly losing power and this is one manifestation.
In my opinion this means China will start paying for its oil in Yuan. The oil export nations will have surplus Yuan to buy Chinese goods and services. The U.S. is in trouble. 2016 will be when the curtain is lifted and we are cut loose.
The begining of the end.
1913-2016 R.I.P dollar ponzi scheme.
While I'm with you on the Schadenfreude - this has been talked about many times, what happened to shadow stats 2014-15 hyperinflation?? everyone still paying their subscriptions in dollars ok? not to mention the many it's end game in 201X where X is accumulating from 08 to ~, someones bound to right at some point so keep posting as the mayian's a reading this aswell
2016? Not even a remote chance. Perhaps a few decades from now the USD will fade to irrelevance, or perhaps it will continue to rise in "value". But no chance whatsoever of it dying in 2016, so you can take your time writing the eulogy.
In August the IMF said they were delaying their approval for a year, or at least well into 2016.
Since that time, China has seen 4 RMB bond hubs open in London, Russia, South Korea, and Germany, created a new 'counterfeit proof' 100 Yuan bill for international use, and adjusted their currency several times.
While the Fed and ECB jawbone for a year on interest rate changes, China is making actual reforms and upgrades at lightening speed.
Is this really a bad thing? Let China be the world's policeman in the 21st century. Great Britain blew it's wad in the 19th, and the US in the 20th.
Yes. Take a look at the megabubbles in Chinese credit and tell me again you think it's really good idea to hand them the tiller.
"Unless something dramatically changes in the next three weeks, of course, although that seems unlikely: [...]"
Stranger things have happened.
Right?
Also, the repeated statement "...assuming it meets the criteria for inclusion..." looks to me to be a "set" statement, to be followed by a "spike" later.
It would be interesting to know what the "criteria" are for inclusion, and if, say, some military aggression might disqualify it...you know...like firing on a ship passing too close to territorial waters, or a bomber being shot down while buzzing a man-made island?
Of course the IMF did this to support heavy handed economic manipulation.
That is precisely why the IMF exists. That is precisely what they believe in. They are progressives.
They cannot conceive that ordinary people could be more capable of managing their own affairs than an elitist bureaucrat on the other side of the planet who achieved his position due to his social connections.
They are those connection as prima facie evidence of their superiority.
Oligarchs, yes. Financial manipulators, yes. Progressives?! HAHAHA.
The lack of imagination and knowledge demonstrated by so-called conservatives is simply astounding in its monotonic banality.
The IMF exists as a means to exploit countries resources for the benefits of multinational corporations, no more no less. Not a single 'progressive' idea to be found outside of rhetoric.
Big deal - it's still 50 Shades of Paper NO matter how you fill the basket....
I guess the SDR at least needs one currency that is not going down the drain in a few months, years.
chinese popular philosophy:
1) get shitload money
2) gtfo of dodge
"Welcome to Vancouver"
you mean HONGcouver
VanKong
We knew this was coming from all the articles going back a year, I'm too lazy to search. Next up will be Saudis and UAE selling treasuries and announcing they will export in RMB (Yuan) which will fuel more WWIII proxy wars. If/when things get really bad China depegs and announces they have 50,000 tons of gold to back their currency. It's either fascism or communism from here on out, pick your poison.
Now there is a stable economy - run by communists with 3/4 of the population living in third world status and your best customer is viewed by their military as the biggest threat. No problem here.
FX the fuck out of that!
GREEN LIGHT !!!!1111111 (bottom right hand corner of image [Economist Cover].
http://vigilantcitizen.com/wp-content/uploads/2015/01/boy.jpg
Next....Panic?
http://www.truthcontrol.com/forum/crazy-2015-economist-cover-mushroom-cl...
"China's heavy-handed intervention to stem a stock market rout over the summer, and an unexpected devaluation of the yuan in August, had raised some doubts about Beijing's commitment to reforms."
Ummm .... really? Lets go back to another August ... say, 2008.
Only the US Fed is allowed to do this kind of stuff! The US was also first to get a nuclear weapon, and no doubt wanted to stop other countries from doing the same.
Take note that the United States has not funded the IMF in over two years (not sure if that was mentioned above). Next up they get kicked the fuck out, seriously, how do you have a vote if you don't contribute? You sure as shit are not playing golf at the country club if you miss your dues for two years!
It would be ironic if they get kicked out of the IMF even though its HQ is in DC.
The US stopped payment to the UN due to a budget dispute. It is still part of the security council.
http://abcnews.go.com/International/story?id=81871&page=1
gunboat diplomacy
Gold beaten down to almost 1K/oz. Then the news about the Chinese bullion withdrawal from Hong Kong COMEX vaults. Now this. Rope-a-dope time, punch-punch-punch.
Like wet leaves,, the Chinese are gonna be squirting lotsa Yuan on the road to make Uncle Sam lose control of the IMF sports car and wrap himself around a economic telephone pole.
Then they and the Russians wll re-monetize gold. The dollar will be kicked to the curb like former royalty reduced to begging.
Grab yer helmets, kiddies, it's gonna be raining BRICS soon! (Might wanna buy some shares in AIIB, if you can.)
Kag, I agree, Gold is not going to be reset in USD, but it will be in Yuan and maybe double or triple. There's no way gold will go from $1K to $3K in USD, it will not be allowed. The new Treasury backed currency is all ready to go with the backing and full faith of the US pensions and retirement funds. Gold will go from $1K USD to $1K in the new us currency, 1:1.
On another note, everyone ask yourself why has their been so many stock buy backs with all the corporations? Because when everything gets reset, there will be less to dump. The average person is going to go batshit crazy dumping their stock, but the corps will hold waiting for the new currency so their valuations don't get crushed from sellers. Just my opinion, but I bet it goes down something like this.
DCBB, the way I see it is that any new currency the US comes up with will be just as full of space vacuum as the old one. "Full faith and credit" having become the joke it is the Chinese and Russians are not laughing, but sharpening knives.
The Chinese are very closely following Sun-Tzu's advice. They know their enemies' weaknesses, and they know their own. And despite their domestic problems, they seem to believe thay can weather them long enough for the RMB to rise as the dollar falls in influence. And from all appearences, that is just what is happening. A 5K year old civilization knows about patience.
Jim Willie's theory was that the Chinese wanted in to shut the IMF down. We'll see.
Jim Willie doesn't know his ass from a hole in the ground then.
I'm guessing Jim Willie is more degreed (PhD Econ Princeton) than you and has more monthly revenue while fucking hot chicks daily living in Costa Rica. Sure, he doesn't know shit.
(Just for the record, I'm not JWillie)
Meaning what? Krugman, Yellen, and Bernanke have those degrees too.
Yes and they're running the world while we sit on these silly message boards. I'm not saying it's right. But, it's the fucking reality.
Yellen, Bernanke and Krugman read ZH for the shits and giggles!
Shits & tears.
Well, with white tower creds like that, how can I possibly doubt his veracity.
Chump.
I was down in San Jose, Costa Rica back in August, right at the time of the 1K point drop on the stock market. I don't mind saying I was very nervous. Because while riding in a taxi I saw bars on every window and door, and razor wire atop any fences.
EVERY window and door. EVERY fence. NO exceptions.
No gringo will ever be safe in any of those countries, no matter how well you thought you fit in, they'll still see you as the 'disposable gringo', the first to get the chop. If people think they'll be safe by going ex-pat come SHTF time, would they please include me in their will?
For real security, I recommend becoming part of .01%
Yep. After moving there, Bill Holter came to the same conclusion -- so he packed up and moved back to Texas.
@Kagemusho: Absolutely! That's why I posted "There's No Place To Run, Jim Rogers!" way back in 2008 at http://GreatRedDragon.com
The commentary was triggerd by Jim Rogers selling out of Manhattan area and moving to the Orient. It also includes the story Jim Willie told of his experiences in Central America, too. Being from Missouri, it's even noted how residents in the Ozarks treat city folks. Not too many people like outsiders, no matter where you're from, when things go bad for the local folks.
Eighteen months ago Jim Willie stated that iran will be replacing Saudi Arabia as the middle eastern top oil producer and Iran will also be new "policeman" of the middle east and this will all be done with the help of the United States. Now eighteen months ago our Department of Defense was preparing to invade Iran, so I thought Jim Willie was crazy, BUT YOU KNOW WHAT??? HE ENDED UP BEING RIGHT!
In the next few years when things are going full tilt,we'll all find out how much Gold China really has and my best guess is about 10,500 metric tonnes.They are prepared for the monetary reset that is coming.And it will include Gold in order to bring stability to the world system.It'll be the way to help stop war and corrupt political spending.Yes,Gold will be repriced high enough in order to reflect the amount of currency outstanding.
What is significant about this action (and future) is not that China "improved" its monetary operations, but that the "West" subverted their own to the lower central planing standards of the Chinese.
What the staff at the IMF had to do was look in the mirror and recognize that the ECB and Fed finally joined the Communist Party statists inside the People's Bank of China.
Made up economic numbers, manipulated currency, crony capitalism, fake markets.
The only thing left is to herald paperless economies. Good luck with that.
I will be watching the call for Walmart to settle everything in RMB, then Bay Area real estate.
Why are the chinese so eager to have Goldman manipulate their currency ala fake ponzi dollar
HAHAHA! Welcome to your new 'third world life' stupid Americans.
Actually, I kind of like it. gives me more time to do your Mom...
if the IMF lets the devil into the club... how can the FED/TBTF bankster Byzantines discuss how many angels can sit on the head of the $ beanstalk as it grows longer and longer.
The Ottomans of Peking/Shanghai are a-coming!
Lady Lagarde now playing at Mata hari !
So after all these words, will this cause a bounce in Chinese stocks Sunday night?
Could someone explain to me the logic behind including a currency that is fixed to another major currency? You would think that inclusion would require the yuan to be floated.
@racetothebottom
That is the first thing I have heard that actuallly makes sense.
Let's greenlight a turd in the punchbowl while we are at it.
"It would be most ironic, however, if China achieves its ultimate objective, which is simply to find foreign buyers for its currency as an offset to domestic outflows..."
If outsized Chinese gold buying over the past 7 or 8 years eventually yields something rather dramatic in scope, would they really have to 'find' buyers for their currency...?
But isn't the Yuan still pegged to the USD?
this could set up the conditions needed to depeg. in fact, it may be the condition it needed to depeg as inclusion in the sdr offers a buffer.
.
I don't know what it means. I don't know what you said. I don't know why, or if, it matters.
“Secretary Lew reiterated that the United States intends to support the Renminbi’s inclusion in the Special Drawing Rights basket provided the currency meets the International Monetary Fund’s existing criteria."
To my way of thinking that statement alone reveals the futility and arrogance of the IMF's entire plan to create these SDRs, the first step toward a one-world currency.
First of all, what exactly qualifies a currency for acceptance? Obedience, and nothing else.
Secondly, when Secretary Lew says "provided the currency meets the International Monetary Fund's existing criteria", what the asshole is really trying to portray is that the IMF is so all-powerful that they could, if they wanted to, still deny acceptance. 'Cause we're the boss.' The arrogance would be laughable if it weren't so infuriating. It's a good thing the Chinese leaders have more patience than I do.
Thirdly, what could possibly change the Yuan so drastically in the next two weeks that suddenly it no longer qualifies? Nothing. So why embarrass the Chinese even further by including that proviso at all? That is totally unnecessary. It is unfriendly. It is unwelcoming. It says "if you suck my dick just right we might let you in". The arrogance is so infuriating and unnecessary that the sooner these evil mofos are all hanging by their balls from crosses row on row, the sooner the world will be free of their tyranny. At that point humanity can get back to what is important, living in peace and thriving as friends.
And lastly, unless these SDRs are fully backed by gold this is a wasted exercise anyway.
Maybe Yuan flys through the roof and allows China to become a true consumer society.
Rise rise
Rise Asia rise
& time for satan America & its europeon followers is now limited
http://www.cfr.org/global/global-conflict-tracker/p32137#!/?marker=4
CFR is The Enemy Within.